Microeconomics for MBAs 11. The Economic Way of Thinking for Managers. Microeconomics for MBAs develops the economic way of thinking through problems that MBA students will find relevant to their career goals. Maths is kept simple and the theory is illustrated with real-life scenarios | Chapter 3 Principles of Rational Behavior at Work in Society and Business 18 Scott Cook who in 1983 developed the widely used home-finance software package called Quicken the major product of Cook s firm Intuit Inc. which was courted for a buyout in 1994 by Microsoft. Cook eventually agreed to sell Intuit to Microsoft for billion in Microsoft stock 40 percent above Intuit s market price at the time. Microsoft agreed to pay a premium price for a couple of reasons. First Bill Gates CEO of Microsoft saw a need to have a dominant personal finance program that could be integrated into his Microsoft Office line and that would allow him to pursue his goal of transforming the way people manage their money. The value of Intuit was greater as an integrated part of Microsoft than by itself. Second and more importantly for the purposes of this chapter Cook agreed to become a vice president of Microsoft and to retain an interest in the future development and use of Quicken if Microsoft bought Intuit. This way Cook could minimize the impact of the last-period problem and the sale of Intuit would mean that Quicken might continue to develop. The proposed buyout of Intuit eventually was terminated by the Justice Department which threatened to sue Microsoft for antitrust violation. However the example is still a good one not only because it involves prominent business personalities and their successful firms but also because of the moral it illuminates Sometimes by selling only a part of the company an owner can increase the value of the part that is sold enhancing the combined value of the part that is sold and the part that is retained. The last-period problem also helps to explain why fathers or mothers are so anxious for one of their sons or daughters to go into their business as retirement age approaches. This not only extends the life of the business but it also increases the amount of business that can be done as the retirement age is approached given that with the .
